Business activity in UK manufacturing sector unexpectedly accelerated in September 2016 to its highest level since mid-2014. The Purchase Managers Index (PMI) jumped to a seasonally adjusted 55.4 points in September from 53.3 points in August. The markets had expected the value to decrease to 52.1 points. Any value above 50 points indicates that the sector is expanding, while any value below this limit talk about contraction.
Experts are indicating that the growth of output, new orders and employment stabilized and explain that a large part of it has weak currency, which encourages export orders and prices for production.
Restoration of the bottoms in July to better data today was encouragingly strong. The development may make an additional positive contribution to GDP in the third quarter. The weak exchange rate remains the main engine of growth and increases in orders from Asia, Europe, USA, and a number of emerging markets. The domestic market also supported the growth, especially as regards demand for consumer goods.
Meanwhile, today the GBP hit a new 3-year low against the EUR after news that Britain will start the procedure for leaving the EU by the end of March.
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